Title
Amend Ordinance S-45785 Adopting the 2019-20 Annual Budget for Operating Funds (Ordinance S-46714)
Description
An ordinance (Attachment A) amending Ordinance S-45785 adopting the 2019-20 Annual Budget to authorize reallocating appropriations among lawfully available appropriations to ensure the continued operation of the City of Phoenix in the payment of necessary expenses.
Report
Summary
This legally required amendment to the 2019-20 Operating Budget will allow the City to close out the current fiscal year's budgetary accounts and proceed with the annual independent audit. This is a standard end-of-year process required to close the books.
State law precludes any expenditure not included in the budget even if additional funds become available. This means all expenditures require an appropriation. An appropriation is the formal recognition in the City's official accounting records that the City Council has approved spending authority. State law allows the City Council to transfer spending authority between line items in the adopted budget. This does not represent an actual transfer of funds, but rather, only transfers of spending authority between specific areas. As a result, the total bottom line budget amount for 2019-20 does not change.
To make sure all planned expenditures have appropriate spending authority, each year the Budget and Research Department brings to the City Council a request to amend the original budget amounts between specific areas at the end of each fiscal year. This is a normal part of the annual budget close-out process. Variances between estimated and actual expenditures that trigger the need to do these reallocated appropriations are usually caused by timing differences, such as expenditures originally planned for the early part of the 2020-21 fiscal year that actually occurred during the 2019-20 fiscal year. These timing variances can be quite large, especially when dealing with construction contracts. Allowing for these timing differences in our request for year-end budget amendments allows for bid awards and payments to vendors to proceed.
The amendments to the 2019-20 Operating Budget require City Council approval to move spending authority from areas where excess authority is available to other areas where insufficient authority was originally provided due to normal changes during the year.
Decreases in 2019-20 appropriation authority are requested in the following:
- General Fund General Government Funds due to the carryover of funds for the Case Management System, the Ballot Tabulation System, and the Business License System from 2019-20 to next fiscal year.
- Aviation Funds due primarily to project contingency funding that was not needed and the carryover of project costs to next fiscal year.
- Transportation 2050 Funds due primarily to the carryover of light rail extension project costs from 2019-20 to next fiscal year.
Increases in 2019-20 appropriation authority are requested in the following:
- General Fund Environmental Services due to unplanned facility and fleet maintenance needs.
- General Fund Capital Improvement Funds as a result of increased funding for Police aerial fleet unit replacements.
- Community Reinvestment Funds due to unanticipated legal expenses for various downtown projects.
- Court Awards Funds as a result of unplanned Police equipment and vehicle expenses.
- Federal and State Grant Funds primarily due to the receipt of Coronavirus Relief Funds and other various grant awards in Fire, Police, Public Works and other departments that were not included in the original budget.
- Golf Course Funds due to unanticipated maintenance costs.
- Human Services Grant Funds due to the receipt of Coronavirus Relief Funds and due to the reallocation of funding for Workforce Innovation and Opportunity Act (WIOA) grants from Federal and State to Human Services grants.
- Sports Facilities Funds to provide contingency for Talking Stick Resort Arena renovation expenditures that may occur in 2019-20 rather than in 2020-21.
- The following funds to provide for minor year-end variances: Cable Communications and Regional Wireless Cooperative Funds.
These are balancing measures with a net impact of $0. The total appropriation remains unchanged.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Budget and Research Department.